The market for upstream acquisitions is good with low asset values but chief executive Rex Tillerson said the company's criteria was unchanged

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ExxonMobil will keep an eye on the market for upstream acquisitions at this time of low asset values but its criteria have not changed, its chief executive Rex Tillerson told the Oil & Money conference in London 7 October. “We are looking for quality assets in terms of people and resources, where we can add value,” he said.

Apart from the Anglo-Dutch major Shell bidding for UK BG, there has been little acquisition activity, compared with the price crash at the end of the 90s. It takes a buyer or a seller “a while to sort out the value of a business,” Tillerson said.

Owning midstream assets would only be important to ExxonMobil if that would improve the security of its supply, he said. “We do not need to own these assets, they are not core,” he said. “So many people know how to do that, and we are content to allow people to do that for us. The question is who the other party is, and do we get better security through them owning them. Our equity barrels must get to market,” and infrastructure was only an “enabling facility”.

He also said that given the long lead time to bring a reservoir on line, there would always be a dislocation between supply and demand. The wave of activity in the US had brought some 1m barrels/day of new shale or tight oil to the market in a year.

Tillerson used the opportunity to say that thanks to the competitive US power-generation market, the country’s emissions of carbon dioxide were back to 1990 levels, as cheap gas had displaced coal. “What roles can governments bring to the effort of cutting CO2?” he asked. “We’ve proven that competitive, free markets will spur us to invest and innovate.” Governments work best when they provide a sound tax and regulatory framework and companies can operate on a level playing field. He said a revenue-neutral carbon tax would be the best way to achieve the goal of cutting emissions, a view that Total’s chief executive, Patrick Pouyanné, told the conference was not far removed from his own.

Total was one of the six European majors who wrote to world governments in June, urging them to introduce carbon pricing schemes but without specifying which option they preferred. Senior ministers are to meet in Paris late November as part of their continuing efforts to find a global approach to cutting CO2 emissions.